AbstractDeregulation efforts and electric system
failures in the U.S. and around the world have
inspired a heightened interest in electric
reliability issues. While system planners push for
increased supply capacity, conservation advocates
lobby for methods of controlling demand. This talk
will summarize the results from an exploratory
analysis of residential customer response to a
dynamic rate that was designed to reduce peak
electricity consumption. Under the critical peak
pricing (CPP) experiment, local electricity
distribution companies dispatched high peak prices
fifteen times per year and measured household
electricity use in 15-minute intervals. We found
statistically significant load reduction for
participants both with and without automated end-use
control technologies.

During five-hour critical peak
periods, participants without control technology
used up to 13% less energy than they did during
normal peak periods. Participants equipped with
programmable communicating thermostats used 25% and
41% less for five and two-hour critical events,
respectively.

Thus, this study offers convincing
evidence that the residential sector can provide
substantial contributions to retail demand response,
which is considered a potential tool for mitigating
market power, stabilizing wholesale market prices,
managing system reliability, and maintaining system
resource adequacy.